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CYRIL VANIER, CNN ANCHOR (voice-over): Vladimir Putin decides not to retaliate against U.S. sanctions, at least for now. This as a U.S. power company finds evidence of Russian malware on one of its computers.

The Syrian cease-fire makes it to another day but it remains fragile. Opposition groups say there have been numerous violations of the agreement.

Plus cities around the world find new ways to increase security in preparation for New Year's celebrations.

Hi, everyone. Thank you very much for joining us. I'm Cyril Vanier, live from Atlanta. And your CNN NEWSROOM starts right now.

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VANIER: Just hours after Russian president Vladimir Putin announced he will not take any immediate actions over new U.S. sanctions, we're now hearing that Russian malware has been discovered on a computer belonging to a U.S. power company in Vermont.

Investigators believe it is the same type of malware recently used to hack into U.S. political institutions. We will have a lot more on that in just a moment.

But meanwhile, President Vladimir Putin stunned Washington on Friday when he said he would hold off on expelling U.S. diplomats from Russia. He said he would wait to see what Donald Trump would do as president.

Trump applauded the Russian leader's decision in this tweet, "Great move on delay by Vladimir Putin. I always knew he was very smart!"

ATHENA JONES, CNN CORRESPONDENT: A caravan of vehicles spotted leaving this Maryland compound used by Russian diplomats, headed for the Russian embassy in Washington. The evacuation come after the Obama administration ordered the shuttering of the site along with a similar compound in New York and told 35 alleged Russian spies to leave the country within 72 hours.

In a surprise move, Russian president Vladimir Putin appeared to shrug off the administration's action.

After Russian officials promise a series of, quote, "countermeasures" would be announced today, Putin changed course, saying in a statement, "We will not create problems for American diplomats. We will not send anyone away," even if sending this unusual invitation to the children of U.S. diplomats there, saying in a tweet, "I invite all children of the U.S. Diplomats to the New Year and Christmas children's show at the Kremlin."

Signed, "Yours sincerely, Vladimir Putin."

The Russian president's decision not to retaliate contradicting his foreign minister, who proposed expelling U.S. Diplomats in response.

SERGEY LAVROV, RUSSIAN FOREIGN MINISTER (through translator): The U.S. Administration, without any facts or proof declared a new wave of sanctions against the Russian Federation. We cannot let such escapades happen without a response.

JONES (voice-over): Putin appears to be waiting for President-Elect Trump to take office signaling once again that he expects to have warmer relations with President Obama's successor.

Meanwhile, the White House is defending and explaining its moves.

LISA MONACO, WHITE HOUSE HOMELAND SECURITY ADVISER: We are putting forward a set of actions designed to respond to and impose consequences for Russia's aggressive activity. So included in that is this expulsion of these intelligence officers.

JONES (voice-over): As for these operators kicked out of the U.S., the Russian said Russia was sending a plane to bring them back home.

JONES: Now among those expelled some based on the West Coast, the Russian consulate in San Francisco, tweeting a statement, condemning what they call "an unfriendly and completely unjustified step being taken by the outgoing administration."

Speaking of the outgoing administration, President Obama's critics on Capitol Hill have been slamming him for what they call "years of failed policy" toward Russia, starting with his attempt to reset relations between the two countries.

Meanwhile, President Putin appears to be pushing for another reset with the incoming Trump administration. All this setting up a foreign policy challenge for Obama's successor, even before day one -- back to you.

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VANIER: Athena Jones reporting there.

Let's turn back now to the other developing element which feeds into the same story.

The Russian malware found at the U.S. power company, Burlington Electric in Vermont, has released this statement, "We took immediate action to isolate the laptop and alerted federal officials of this finding.

"Our team is working with federal officials to trace this malware and prevent any other attempts to infiltrate utility systems."

Vermont Senator Patrick Leahy is also responding. "This is beyond hackers having electronic joyrides. This is now about trying to access utilities to potentially manipulate the grid and shut it down in the middle of winter. That is a direct threat to Vermont and we do not take it lightly."

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ANIER: Richard Anderson is a professor of political science at UCLA.

[03:05:00]

VANIER: He joins us from Los Angeles via Skype.

We have been talking about this since yesterday, Richard. Yesterday you were telling us that the back-and-forth of sanctions between the U.S. and Russia was mostly political theater with little real impact. Let's talk about this new development.

If it does turn out that Russia is trying to hack into electrical grids here in the U.S. doesn't that move the needle?

RICHARD ANDERSON, UCLA: No. I don't think so. My guess is that both countries are hacking into each other's grids. Part of political theater is to promise to protect people against war and, you know, if a war happens to, in fact, want to be prepared.

And for many years the Russians have been engaging in a variety of covert operations in Western Europe, in the United States, to prepare in advance for the possibility of a conflict.

That doesn't mean that they mean to conduct such a conflict. It just means that they are going through the preparations. Armies train; weapons are produced. Everybody gets ready for the war that they hope will never happen.

VANIER: OK, but let's consider potentially the political impact for Donald Trump.

Do you think the president-elect, soon to be president, can stick to his line of better relations with Russia after this?

ANDERSON: I think he can. I think the thing to say is that part of his negotiation with the Russians will be to get an agreement on both sides to stop doing this sort of thing. I think that agreement will be very hard to enforce. I think it will be carefully worded so as to allow a lot of it to go forward.

I also have always thought that there are limits to how close the United States and Russia can cooperate. Those limits are set by the bad news that's going to continually come out of Russia: bad news human rights violation, bad news underhanded conduct, crime, corruption.

All of these things are going to make that relationship tense all the time. But it doesn't have to degenerate. It just will be a certain amount of stress.

VANIER: How do you interpret Vladimir Putin not taking new measures, new retaliation against the U.S., despite dozens of Russian diplomats being expelled on Thursday?

ANDERSON: Well, one of the things that's happened in the former Soviet Union and Russia in particular has been a religious revival. And, you know, the Russians are Christians or that's the state religion, at least, and Christianity tells you don't hit back.

So this is a chance for Vladimir Putin to grab the moral high ground and, I think, he's taking it.

VANIER: All right. Richard Anderson, professor of political science at UCLA. Thank you very much for your insights.

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VANIER: Suicide bombers have killed at least 28 people in Baghdad. Police say that two attackers detonated their vests on a crowded commercial street in the Iraqi capital. This was the scene afterwards. The blast wounded at least 53 other people and leveled several businesses.

So far no group has claimed responsibility.

Let's turn our attention to neighboring Syria. Opposition groups there say the new cease-fire has been violated more than 30 times in the first 24 hours. The Syrian Observatory for Human Rights reports that at least 10 people were killed on Friday; nine of them just northeast of Aleppo in Telef (ph), as you see on the map.

Officials still hope that this cease-fire will start the road toward lasting peace. Our Muhammad Lila has the latest.

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MUHAMMAD LILA, CNN CORRESPONDENT: We have now officially passed the 24-hour mark since the cease-fire began and all of the indications on the ground are that the cease-fire, however fragile it might be, is holding at the moment. There were reports of sporadic clashes around the country, outside of Damascus and in the countryside, in other locations but none of the groups on the ground, the militant groups that were fighting or Syria, Turkey, Russia, Iran consider those sporadic clashes to be a violation of the cease-fire.

And this is critical because the first few hours and the first few days of the cease-fire will determine how well and how deep this cease-fire is taking hold. So the first day, if it's any indication, is certainly a positive sign.

Now if the cease-fire does hold for the next several days and weeks, the plan is for there to be long-term peace negotiations and those talks will involve Turkey, Russia, Syria and Iran.

Of course, those are the major players with very deep interests in how the Syrian conflict plays out. The Kremlin earlier on bypassing U.S. President Obama and speaking directly to U.S. President-elect Trump, saying that Trump would have a seat at that negotiating table if he chose to take it.

And at that negotiating table, they are expected to discuss the prospects for a long-term and a permanent cease-fire as well as the future of Syria's president, Bashar al-Assad.

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LILA: We know in the past that Bashar al-Assad has been a red line for the Iranians, the Syrians and the Russians, saying that he is the leader of that country and should not have to step down.

Turkey, of course, since day one, has said that Assad's future is nonnegotiable. They insist that he needs to step down in order for there any kind of political settlement.

Now Assad's future aside, the most important thing that all of the observers are watching is whether this cease-fire will hold and, so far, based on just the first 24 hours, it appears that it is holding -- Muhammad Lila, CNN, Istanbul.

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VANIER: CNN military analyst Lieutenant Colonel Rick Francona joins us now from California via Skype for more on this.

Rick, under the terms of the cease-fire, fighting may continue against terror groups. That's to say the Syrian government and Russia and their allies can continue to fight against what they deem to be terror groups.

But when you know that the Syrian regime considers all opposition fighters to be terrorists, does this just mean that they have got a blank check to keep fighting against whomever they want?

LT. COL. RICK FRANCONA (RET.), CNN MILITARY ANALYST: Yes, in the past, this was really a problem because both the Russians and the Syrians continued to bomb whoever they wanted and when challenged, they said, well, we deemed these groups to be terrorists. And I saw this today. If you look at the bombing that was going on in

the suburbs of Damascus, technically those groups could be considered terrorists. And I think that's why the overall feeling is that the cease-fire is holding.

But this is going to be a problem down the road because the Syrians are going to bomb whoever they deem to be anti-regime and they would just call them terrorists.

But there's a difference here this time. This cease-fire has much better chance of holding because I think the rebels realize that this may be their last chance before they suffer a really devastating military defeat. So I think we're going the see more leeway in -- when they complain about being bombed and being labeled terrorists.

VANIER: I wanted to ask you about this precise notion that you're referencing here.

For the first time since the civil war began, most major players are now on board. That's Russia, Turkey, Iran, the Syrian government, half a dozen rebel groups.

So how much of a turning point is this then?

FRANCONA: Well, it's a big turning point, because, one, the United States is not involved and it does not throw in that extra wrench of that red line on the United States' side that Bashar al-Assad has to go.

They're taken that out of the equation. The Turks still want Assad to go but they are willing to sit down at the table and talk about it. So I think the Russians and the Iranians have found a more pliable partner with the Turks.

So with that in the equation, I think there is a better chance that this gets to the next stage. We have never had one of these go to an actual conference. That's a good thing.

But like I said, the rebels are probably realizing that this may be their last chance and they're more willing to compromise. I think they are just looking for some survival mechanism now. I read all of the Arabic language tweets and press and announcements on Facebook, different social media.

And there is a definite change in the tone of their posts because of their loss in Aleppo. They're really feeling defeated.

VANIER: Now two players have been sidelined and they're major players, the U.S. and the United Nations. We're used to seeing those playing a major role in a major world conflict.

How much long-term damage do you think this does to their credibility?

FRANCONA: Well, I think the United Nations is suffering a problem all along because -- and, unfortunately, they catch it from both sides. Both sides are easy to complain about the United Nations. It's the United States' piece that I think we've got to look at. And without the United States involved in this, we don't know how long this will actually last.

Can they actually come up with a long-term plan that will work without U.S. backing?

And I think what we're seeing now is kind of this confrontation between Vladimir Putin and Barack Obama. And as we've heard, Mr. Putin said that after January 20th, we may bring the United States back into that.

So I think that Putin is playing a real political game here and he's playing it very well. He was very effective. He used the Russian military to crush the opposition in Aleppo; he forced everybody to the table and now he's dictating who can sit at the table.

So hopefully after January 20th, we can get the United States back, involved in this.

VANIER: All right, Rick Francona, CNN military analyst, always a pleasure having your insights. Thank you for joining us on the show.

FRANCONA: Nice to be with you, sir.

VANIER: We're going to take a short break but we have a lot more.

When we come back, a Brazilian cop suspected of killing Greece's ambassador. We will have his apparent connection to the man's widow, who's also in police custody.

Plus backlash for the U.S. secretary of state over his speech on Israel. Up next, what the U.K. prime minister had to say about Kerry's tough talk.

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VANIER: Police in Rio de Janeiro are calling the death of the Greek ambassador to Brazil "a crime of passion." Investigators are holding the widow of Kyriakos Amiridis (ph). She's accused of ordering a military police man, said to be her lover, to kill her husband.

Police say the man's cousin also helped. Amiridis (ph) had been missing since Monday. His charred remains were found in a burned car on Thursday outside Rio. Brazilian news reports that Amiridis (ph) was appointed ambassador last January. So far no charges have been filed in his death but all three suspects are under temporary arrest.

The U.S. State Department is saying it is surprised by the backlash from the U.K. prime minister over American statements on Israel. This given how close the U.S. and the United Kingdom are, it's highly unusual. Sara Sidner has more.

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SARA SIDNER, CNN CORRESPONDENT: More diplomatic fallout after the U.N. resolution that condemned Israel for settlement activities, saying that it is an absolute impediment to peace and against international law.

The United States abstained from that vote; the U.K. voted for that resolution. And now, though, we're hearing the U.K. criticized U.S. Secretary of State John Kerry. Prime Minister Theresa May coming out, saying she feels like he focused too intensely on the settlement issue when there are many issues here that are keeping peace from being able to happen and keeping a peace deal from coming to fruition.

And so she condemned Mr. Kerry for his comments. But then the U.S. State Department responded, saying they're very surprised to hear this from Prime Minister May because it is a longstanding British policy.

And they indeed voted for this very resolution condemning Israel on the settlement issue.

So you're seeing these rows go on with different countries and Israel certainly very angry about the U.N. vote and angry with the countries that voted for it as well as the U.S. for abstaining, because it allowed the resolution to be put down on paper and go through.

But in the end, these are, for the most part, allies; the U.S., Israel and the U.K. And Israel said, while it sees the Obama administration going out, they'll be happy to see another administration coming in. And that is the Trump administration. We saw Benjamin Netanyahu today, putting on his Facebook some compliments, if you will, to Donald Trump for the way that he talks about the Israel-U.S. relationship --Sara Sidner, CNN, Jerusalem.

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VANIER: Every day here on CNN, we follow the ups and downs of the presidential transition as we count down to Donald Trump taking office. Here's a different angle on this story.

Performing at the presidential inaugural event is usually a huge honor but this election was so divisive that some entertainers have a "thanks, but no thanks" attitude. Jean Casarez has more.

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JEAN CASAREZ, CNN CORRESPONDENT (voice-over): Marching bands across the country are going to Washington for Donald Trump's inaugural festivities. Forty organizations will be in the parade, 8,000 participants.

But a new controversy --

[03:20:00] CASAREZ: -- controversy surrounding those performers. Jan Chamberlain, a four-year member of Utah's Mormon Tabernacle Choir, a state Trump won handily, has written a lengthy public Facebook posting that she is quitting the choir because it agreed to sing for the president-elect.

"It is with a sad and heavy heart that I submit my resignation to you and to the choir. I simply cannot continue with the recent turn of events. I could never look at myself in the mirror again with self- respect. I also know, looking from the outside in, it will appear the choir is endorsing tyranny and fascism by singing for this man."

The Mormon Tabernacle Choir said the performance is voluntary and the choir's participation continues its long tradition of performing for U.S. presidents of both parties at inaugurations and at other settings.

Late Friday, Chamberlain responded to criticism.

JAN CHAMBERLAIN, FORMER MEMBER, MORMON TABERNACLE CHOIR: I value that in our country we have freedom of speech under the First Amendment. For me, this is not a political issue. For me, this is a moral issue where I'm concerned about our freedoms being in danger.

CASAREZ: This coming just days after it was announced the legendary New York City Rockettes would be performing at the inauguration.

In an interview with MarieClaire.com, one Rockette spoke out about the decision, "The majority of us said no immediately. Then there's the percentage that said yes, for whatever reason."

The dancers' union ultimately deciding that participations in the inauguration will be voluntary. Madison Square Garden, which employs the dancers, adding, "We had more Rockettes request to participate than we have slots available."

BORIS EPSHTEYN, DIRECTOR OF COMMUNICATIONS, TRUMP INAUGURAL COMMITTEE: It's not about the big names. It's about the American people. And that's who will be represented all over this inaugural. And we've gotten such an outpouring of support, of positivity from all the country. It's been truly humbling.

CASAREZ (voice-over): Jean Casarez, CNN, New York.

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VANIER: Now once again, Beijing and surrounding cities are dealing with choking smog and now the highest alert level has been issued for the region. We will get more on this story with meteorologist, Pedram Javaheri, who is joining us here from the International Weather Center at CNN.

PEDRAM JAVAHERI, AMS METEOROLOGIST: When you think of Beijing, as you said, this is something that happens so frequently. We will talk about why it happens and why it's so frequent and what can be done about it. The scenes out of Beijing, when you look at the conditions there in

the past 24 hours, here's a farmer for you. The perspective out there, of course, very little to see. And you take a look at the hazy conditions, the particulates that make up this haze are 30 times smaller than the diameter of your hair.

You put billions of these particulates together and it looks something like this. This is precisely what is going on as far as the energy consumption, so densely populated and of course the factories that are consuming the coal.

Put that perspective in place and now you are talking about very unhealthy to hazardous air quality almost on a daily basis in this portion of the world. We know the health implications are there. We know premature death, decreased lung function, there's an environmental impact of course, damage to farm crops.

There's an aesthetic aspect of this when it comes to just culturally important statues and monuments being damaged, such as the Great Wall of China.

But what's the cost of this financially speaking?

According to the World Bank, 6 percent of China's GDP is at stake every year when you take into account the health impact, the damage to natural resources, the agriculture industry and the tourism board, the Chinese Tourism Academy says that they think tourism has been down the last three years in a row because of the pollution in place and continues to worsen.

Here you go, 365 days in 2015 in particular, about 175 of those days, so essentially one every in every two days was considered unhealthy air, unfit to breathe. Of course it's not just China.

When you look at the top 20 most polluted cities on the planet, not a single one of them is in China. In fact, upwards over 10 of them are located in places such as India. India has 13 of the top 20 in those observation points. That's 70 percent higher than the national standard as far as the air quality is concerned.

Some people find it very surprising to find out places like Paris, France, in particular, have major air pollution issues as well. In fact, the third leading cause of death in France is associated with air pollution and air quality concerns.

You take a look at the populations, less than 100,000 people, it is estimated that life expectancies lessen by about nine months. You increase that in a city greater than 100,000 people and then it is estimated that over a 15-month period of your life is lost.

I know, Cyril, you have lived across this place, as far as France is concerned, and you've experienced that firsthand. People are often surprised to hear but it is rough in that region as well.

VANIER: Yes, and I have asthma and the number of people that have asthma and breathing related problems is increasing. I think it has to do with the pollution.

JAVAHERI: There's steps being done right now to try to alleviate some of it. But of course a lot more needs to be done as well.

VANIER: Pedram Javaheri --

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VANIER: -- thank you very much, always appreciate the input.

JAVAHERI: Thank you for having me. Yes.

VANIER: The countdown is on for New Year's. In the Pacific island nation of Tonga, it will be among the first to celebrate the arrival of 2017. That's happening in less than two hours.

However, terrorism is a constant threat. So cities everywhere are beefing up security. CNN's Brynn Gingras has more from New York.

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BRYNN GINGRAS, CNN CORRESPONDENT (voice-over): New York City is on high alert in anticipation of one of the biggest New Year's Eve celebrations in the world. Securing it takes an army; 7,000 NYPD officers are just one part of the enhanced measures being taken to protect the city.

UNIDENTIFIED MALE: This is where everybody has got to be on their toes. I know complacency can set in at times but certainly not in an event like this.

GINGRAS (voice-over): In the wake of the ISIS-inspired attacks in Berlin and Nice, 65 sand trucks and 100 blockers will be stationed around the city, most being used as a protective barrier around the perimeter of Times Square to ward off a truck-style attack.

UNIDENTIFIED MALE: We live in a changing world now. And again, as I said before, it can't be just about what happens in New York.

GINGRAS (voice-over): The NYPD is in constant communication with foreign departments, gaining intelligence and sharing police strategy with cities abroad.

In London, there is added security at the changing of the guards. Heavily armed police were unavoidable in Berlin as they stood post behind concrete barriers at a Christmas concert.

Czech holiday markets were heavily patrolled. And, in France, the government announced a boost of 10,000 soldiers on the Parisian streets over the holiday period, adding to the officers working around the clock.

UNIDENTIFIED MALE (through translator): We are really giving of ourselves, of our time, but at a cost to us and to our families.

GINGRAS (voice-over): Nearly 2 million people are expected in Times Square. The extra police presence a noticeable addition to keep New York City safe.

UNIDENTIFIED MALE: If you're coming down to Times Square, rest assured that it will be a safe venue.

GINGRAS (voice-over): Brynn Gingras, CNN, New York.

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VANIER: One more thing about 2016-2017. Many people are more than happy to say good riddance to the year that was.

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VANIER (voice-over): But -- there's a but -- Peruvian shamans -- that's them -- are using the occasion for their annual ritual, that's to say predicting what's to come in the New Year and the bad news is they are not very optimistic.

JUAN OSCO, PERUVIAN SHAMAN (through translator): We have seen that the entire world will not be content, will not be in peace, because there will be problems, especially in Donald Trump's administration.

I see that Venezuelan president Nicolas Maduro will not have a good year. He is not favored because he completely refuses to call for good elections or put his country in order. Famine will continue. Chaos will continue.

VANIER (voice-over): The shamans have a decent track record, although last year they did have one big miss: Donald Trump winning the White House.

There you go.

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VANIER: That does it for the shamans. That does it for me and for the show. I'm Cyril Vanier. I will be back with the headlines in just a moment.